U.S. Rep. Mike Gallagher, R-Allouez, has introduced a bill to convert the federal unemployment benefit into a sign-on bonus for new hires.
The Federal Pandemic Unemployment Compensation adds another $300 per week to state unemployment benefits. Congressional and state Republicans, as well as business chambers, associations and employers, have charged those benefits with contributing to a statewide labor shortage.
Meanwhile, state Dems have expressed concern that ending benefits would harm parents struggling to find child care as the pandemic hasn’t ended. They also point out that the labor shortage has existed long before the federal benefits came along.
But Associated Builders and Contractors Director of Legal and Government Affairs John Schulze argues the shortage is worse now.
“There was a worker shortage before the pandemic, and especially in the skilled trades. But before the pandemic, restaurants were able to fully staff,” Schulze said. “There was a worker shortage in the past, that’s true. It’s worse now.”
Proponents of nixing the benefits say state and federal unemployment dollars could add up to more than $16 per hour. Schulze said that while people aren’t “living large” on unemployment, if someone can live frugally with added federal benefits, then it eliminates the need to work.
The bill would allow each state’s department of labor to use FPUC funds to provide a reemployment bonus equal to more than two months of the federal enhanced unemployment benefit.
The bonus would be made in two payments to individuals who demonstrate new and continued employment. The first $1,212 payment would be made after an individual can verify four weeks of employment, and the second $1,212 payment will be made after an individual completes eight weeks of employment. Once they return to work, individuals would no longer be able to receive FPUC or other unemployment benefits.
ABC of Wisconsin President John Mielke commended Gallagher’s effort to change the incentive to encourage people to work. ABC represents 900 member companies in Wisconsin.
“Wisconsin is reopening, and we need a pro-recovery plan to get people working again and help address the critical worker shortages preventing the economy from making a recovery,” Mielke said.
In announcing the new legislation, Gallagher noted small businesses across his district — northeast Wisconsin — are struggling because of the federal unemployment benefits that “encourage people not to work.”
“If Governor Evers isn’t going to end this disastrous program — as more than 20 other states have already done — the least we can do is allow for states to spend these dollars in a way that actually encourages people to rejoin the workforce,” he said.
His colleague U.S. Rep. Mark Pocan, D-Town of Vermont, argues this bill does nothing to help businesses facing staffing shortages or workers who can’t return to work.
“This bill does nothing to help the industries that are still suffering as a result of this pandemic — from restaurants and taverns to tourism and the convention & meeting industry. Nor does it help the workers in the most devasted frontline businesses still facing high unemployment and need federal benefits to survive,” Pocan told WisBusiness.com. “Until more people get vaccinated and the economy reopens, we cannot cut benefits that too many American people rely on to provide a roof over their head and food on the table.”
This bill is supported by Wisconsin Manufacturers & Commerce, the Greater Green Bay Chamber of Commerce, KI Manufacturing and the Fox Cities Chamber of Commerce.
-By Stephanie Hoff